Ethereum appears to be gaining a bit more traction on its climb as it formed higher lows and slightly higher highs, creating a rising wedge. Price is testing resistance so it could be due for a move back to support.
Price is also approaching the peak of the formation so a breakout could take place soon. The 100 SMA is above the longer-term 200 SMA to suggest that the path of least resistance is to the upside or that a break higher is more likely to happen.
However, RSI looks ready to turn lower to indicate a return in selling pressure. Similarly stochastic is moving down from overbought levels to show that sellers are regaining control while buyers take a break.
A move below the $530 level could be enough to signal a downside break and set off a drop that’s the same height as the chart pattern. On the other hand, a move past the $550 level could signal an upside breakout and spur a rally of around $90-100.
Cryptocurrencies are slowly recovering from earlier declines as the mood in the industry is improving a bit. Although there have been reports of a Bithumb hack, investors appear to be dealing with this news better compared to their reaction to the Coinrail hack.
Reports suggesting that Tether probably wasn’t used to manipulate bitcoin price last year also eased fears for investors. Keep in mind that US regulators are still conducting a probe into potential price manipulation in bitcoin or ethereum, so the results of their investigation could still impact the industry.
Meanwhile, the dollar could be on shaky footing due to escalating tensions between the US and China. Trump has threatened to slap tariffs on $200 billion worth of Chinese goods while Beijing responded that it could impose strong countermeasures in reaction.